Leading economists slam Gigaba for SAA bail-out
‘No plan in place for carrier to get itself out of its financial problems. We are bailing them out without anything in place, which must be of concern to the ratings agencies’
Finance Minister Malusi Gigaba took flack from economists on Sunday for capitulating too easily to the demands of state-owned airline SAA for a R2,3bn bail-out without imposing tough and stringent conditions on the cash injection. With no measures in place to stem the losses at the flagging airline, the need for a further bailout seems inevitable the economists said. SAA is said to be losing about R370m a month and to be having difficulty in paying salaries. The airline has notched up an unaudited loss of R1,9bn for the year to end-March 2017, up from the previous year’s loss of R1.5bn. Chairman of Parliament’s standing committee on finance Yunus Carrim also said the committee would want to know from Treasury what requirements it had imposed on SAA in return for the bailout "to ensure it functioned far more effectively". Treasury’s weekend announcement of the bailout made no mention of conditions, the first of which — according to University of Witwatersrand senior economics lecture...
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